To avoid the Osborne effect, they could simply have produced new versions and only open the source once released.

That's not the real problem. I guess it was a combination of chinese knockoffs and stratasys proprietary instincts.

In any case, IMHO, the layoffs are a result of losing the open community, which is now being serviced by true open-source proponents like Aleph with their excellent Lulzbot printers.